JLT Mobile Computers' (STO:JLT) Dividend Will Be kr0.27

The board of JLT Mobile Computers AB (publ) (STO:JLT) has announced that it will pay a dividend on the 12th of May, with investors receiving kr0.27 per share. This means the annual payment is 3.5% of the current stock price, which is above the average for the industry.

Check out our latest analysis for JLT Mobile Computers

JLT Mobile Computers Doesn't Earn Enough To Cover Its Payments

If the payments aren't sustainable, a high yield for a few years won't matter that much. Before making this announcement, the company's dividend was much higher than its earnings. Without profits and cash flows increasing, it would be difficult for the company to continue paying the dividend at this level.

Looking forward, EPS could fall by 8.4% if the company can't turn things around from the last few years. Assuming the dividend continues along recent trends, we believe the payout ratio could reach 140%, which could put the dividend under pressure if earnings don't start to improve.

JLT Mobile Computers' Dividend Has Lacked Consistency

JLT Mobile Computers has been paying dividends for a while, but the track record isn't stellar. This suggests that the dividend might not be the most reliable. The dividend has gone from kr0.05 in 2014 to the most recent annual payment of kr0.27. This implies that the company grew its distributions at a yearly rate of about 23% over that duration. It is great to see strong growth in the dividend payments, but cuts are concerning as it may indicate the payout policy is too ambitious.

Dividend Growth May Be Hard To Come By

Growing earnings per share could be a mitigating factor when considering the past fluctuations in the dividend. JLT Mobile Computers has seen earnings per share falling at 8.4% per year over the last five years. If the company is making less over time, it naturally follows that it will also have to pay out less in dividends.

We're Not Big Fans Of JLT Mobile Computers' Dividend

Overall, while some might be pleased that the dividend wasn't cut, we think this may help JLT Mobile Computers make more consistent payments in the future. The company's earnings aren't high enough to be making such big distributions, and it isn't backed up by strong growth or consistency either. Overall, the dividend is not reliable enough to make this a good income stock.

Companies possessing a stable dividend policy will likely enjoy greater investor interest than those suffering from a more inconsistent approach. However, there are other things to consider for investors when analysing stock performance. Just as an example, we've come across 5 warning signs for JLT Mobile Computers you should be aware of, and 3 of them don't sit too well with us. Is JLT Mobile Computers not quite the opportunity you were looking for? Why not check out our selection of top dividend stocks.

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